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USPS Seeks Legislation To Allow Layoffs, End Federal Benefits APWU President Cliff Guffey has condemned Postal Service legislative proposals that would permit the USPS to layoff 120,000 employees and remove postal workers from the Federal Employees Health Benefits Program and from federal retirement programs. “This is a clear attempt to abrogate our contract and destroy postal collective bargaining,” Guffey said. “Crushing postal workers and slashing service will not solve the Postal Service’s financial crisis
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Legislative & Political Action
Postal Press Association
I think about my NEXT job...
A lot
A little
None at all
New York Times, August 11, 2011
Many See Public Employees’ Compensation As Too Generous
0
15
30
45
60
Jan Feb March
131717
524949
Too Much Too Little
1. Repeal the Davis-Bacon Act. (More than $1 billion annually)
2. Require collection of unpaid taxes by federal employees.
($1 billion savings over 10 years)
3. Prohibit taxpayer funded union activities by federal employees
($1.2 billion savings over 10 years)
Committee Chairpersons
Committee 112th Congress 111th Congress
Appropriations Harold Rogers, KY [0%] David Obey (D-WI) [100%]
-- FSGG Jo Ann Emerson, MO [0%] Jose Serrano (D-NY) [100%]
Budget Paul Ryan, WI [12%] John Spratt (D-SC) [100%]
Education & Labor John Kline, MN [0%] George Miller (D-CA) [100%]
-- HELP Phil Roe, TN [0%] Rob Andrews (D-NJ) [100%]
Energy & Commerce Fred Upton, MI [16%] Henry Waxman (D-CA) [100%]
Oversight & Gov. Reform Darrell Issa, CA [0%] Ed Towns, NY [100%]
-- Fed.Workforce, Postal
Dennis Ross, FL [freshman] Stephen Lynch (D-MA) [100%]
Ways & Means Dave Camp, MI [8%] Sander Levin (D-MI) [100%]
Source: AFL-CIO Voting Record
House Committee on Oversight & Gov. Reform
Subcommittee on Federal Workforce, USPS, and Labor Policy
Dennis Ross, FL Stephen Lynch, MA
Justin Amash, MI Eleanor Norton, DC
Jim Jordan, OH Gerry Connolly, VA
Jason Chaffetz, UT Danny Davis, IL
Connie Mack, FL
Tim Walberg, MI
Trey Gowdy, SC
Justin Amash (R-MI)
Vice-Chair, Subcommittee on Federal Workers, the Postal Service, and Labor Policy
“USPS has raised it’s rates in the last several years and now is threatening deep service cuts. I look forward to examining closely whether some of USPS’s functions could be done more efficiently through competition and the private sector.”
Republicans Democrats
Jon Kyl (AZ) John Kerry (MA)
Rob Portman (OH) Max Baucus (MT)
Pat Toomey (PA) Patty Murray (WA)
Fred Upton (MI) Chris Van Hollen (MD)
Dave Camp (MI) Jim Clyburn (SC)
Jeb Hensarling (TX) Xavier Becerra (CA)
Debt Reduction Super Committee
If Cuts enacted by
January 15, 2012 are: THEN Total
automatic cuts are:
AND Future
debt ceiling is:
$1.5 trillion or moreNone $1.5 trillion
At least $1.2 trillion but less than $1.5 None
Amount of enacted cut
Less than $1.2 trillionDifference between $1.2 trillion and enacted cuts
$1.2 trillion
No legislation enacted $1.2 trillion $1.2 trillion
Current Makeup of the 112th Congress
House Senate
Democrats 193 51
Republicans 240 47
Independents 0 2
Vacancies 2 0
2012 Senate Class
Democrats 21
Republicans 10
Independents 2
USPS Finances
0
55
110
165
220
2006 2009 2010 2011 (proj.)
167171178
213
Volume in billions
USPS Mail Volumes
1st Class Mail Standard Mail
86
39
85
54
8378
10398
Mail Volume Shifting to Less Profitable Mix
2006 2010 2016 2020
Total 2010 Contribution $17B $6B
Employee Catergory 2010 2000 Difference % change
City Carriers 192,180 241,079 -48,899 -20%
Clerks 164,581 291,494 -126,913 -44%
Maintenance 42,388 47,830 -5,442 -11%
Casual, transitional
24,628 43,745 -19,117 -44%
Mailhandlers 48,650 60,851 12,201 -20%
Total Career 583,908 787,538 -203,630 -26%
Non-Labor17%
Capital3%
Labor80%
Labor Capital Non-Labor
$60.3b
$12.6b
$2.5b
USPS Operating ExpensesTotal = $75.4 Billion
Revenue 2011 2010
First-Class Mail $7,761 8,246
Standard Mail 4,179 4,109
Periodicals 454 468
Package Services 354 343
Other Mailing * 810 821
Total Mailing Services 13,558 13,987
Total Shipping Services 2,208 2,058
Total Operating Revenue $15,766 16,045
Three Months Ended June 30, 2011
Wages
Retiree Health
Retirement
Health Benefits
Workers Comp
Other
0 10 20 30 40
$0.4
$3.6
$5.1
$5.8
$7.7
$37.7
Labor Costs, 2010(in billions)
Total = $60.3 billion
Payments from USPS to RHBFPayments from USPS to RHBF
$5.4 billion September 30,2007
$5.6 billion September 30,2008
$5.4 billion September 30,2009
$5.5 billion September 30,2010
$5.5 billion September 30,2011
$5.6 billion September 30,2012
$5.6 billion September 30,2013
$5.7 billion September 30,2014
$5.7 billion September 30,2015
$5.8 billion September 30,2016
Postal Accountability & Enhancement Act
Fiscal Year Total Revenues Total Expenses Net IncomeOutstanding
Debt
2006 $72.8 $71.9 $0.9 $2.1
2007 75.0 80.1 -5.1 4.2
2008 75.0 77.8 -2.8 7.2
2009 68.1 71.9 -3.8 10.2
2010 67.1 75.6 -8.5 12.0
2011 67.7 74.1 -6.4 15.0
USPS Finances(in billions)
Fiscal Year PSRHBF Net IncomeNet Income w/o
Prefunding
2007 $8.4 -5.1 3.3
2008 $5.6 -2.8 2.8
2009 $1.4 -3.8 -2.4
2010 $5.5 -8.5 -3.0
Totals $20.9 $20.2 $0.7
Net Income w/o Prefunding
0
3.75
7.5
11.25
15
2006 2007 2008 2009 2010
5.5
1.4
5.6
8.4
0
2.221.81.71.6
Employer Premium PAEA Scheduled pre-funding requirement
10.1
7.4
3.4
7.7
RHB Payments Equal 12% of 2010 Revenue
The Postal Service’s current financial projections indicate that, as of September 30, 2011, it will have a cash shortfall. In addition, the statutory limit on borrowing will have been exhausted. Without changes in the applicable laws, the Postal Service will be unable to meet all of its financial obligations on September 30, 2011.
USPS: Liquidity
USPS Form 10-Q
Pension Overpayment
OIG Study:USPS’ share of CSRS
Pension Responsibility
For employees with service both before and after the Postal Service’s establishment, the federal
government and the Postal Service share responsibility for CSRS pensions. The federal
government pays for service through 1971, and the Postal Service pays for service after 1971.
Pension Allocation
Federal GovernmentPension amount
calculated based on the June 30, 1971 salary
USPS
Pension amount calculated based on
overall career highest 3 consecutive salaries
CSRS Basic Annuity
1.5% X ‘High 3’ X 5
1.75% X ‘High 3’ X 5
2% X ‘High 3’ X (Years over 10)
Example: 30-year EmployeeHigh-3 of $35,000
1.5% X $10,000 X 5 = $750
1.75% X $10,000 X 5 = $875
2% X $10,000 X 5 = $1,000
2% X $35,000 X 15 = $10,500
Total: $2,625 Total: $10,500
Treasury USPS
Pension Responsibility
80%
20%
USPS Treasury
Had a more equitable methodology been used to determine the value of the Postal CSRS Fund, the OIG estimates its value on
September 30,2009, would have been approximately $273 billion rather than
$198 billion -- a difference of $75 billion.
USPS OIG Finding
OPM Methodology
Under OPM’s methodology, the Postal Service is responsible for all pay increases
since 1971. OPM assumes no responsibility for inflationary increases to salaries from the Post Office Department era. OPM calculates the government’s share for these employees
as if they retired in 1971 at their 1971 salaries.
USPS appealed to the CSRS Board of Actuaries on the use of frozen 1971 salaries for the allocation of obligations between the U.S. Post Office Department and USPS. The
Board noted that the approach used was common in the private sector and upheld the
use of the OPM methodology.
The purpose of this legislation is to clearly establish the responsibility of
the U.S. Postal Service to finance increases in the liability of the Civil Service Retirement and Disability
Fund, caused by administrative action of the Postal Service, as apart from increases in unfunded liabilities which are incurred by an Act of Congress.
P.L. 93-349
Alternatives & Options
HR 1351Rep. Stephen Lynch (D-MA)
1. Instructs OPM to recalculate2. Determines USPS surplus or liability3. If surplus, transfer amount within 15 days4. 181 cosponsors
- 17 Republican cosponsors
USPS White Paper
The Postal Service needs the ability to right size its workforce without being limited by the layoff
protections in the collective bargaining agreements.
August 2011
No union has or ever will lobby for a layoff, so it's up to USPS management and Congress to demand concessions.
If compromise fails, Congress has an obligation to fix the Postal Service's budget imbalance not through a bailout, but through new mandates to cut costs and revise labor agreements.
Rep. Darrell Issa, ChairmanHouse Oversight & Government Reform
The Chairman
HR 2309Chairman Darrell Issa
• Provides for establishment of ‘Commission on Postal Reorganization (CPR).
• Establishment of the ‘Postal Service Financial Responsibility and Management Assistance Authority.
• Frequency of Mail Delivery
Commission on Postal Reorganization (CPR)Postal Retail Facilities - not later than 120 days after enactment USPS required to submit plan providing at least $1 billion less than the baseline year.
Mail Processing Facilities - the bill requires a report, not later than 300 days after enactment to detail cut of $1 billion. Section also requires there be no more than 10 % excess mail processing capacity.
Congressional Disapproval
After receiving the plan, the Commission shall transmit to Congress a report of recommendations.
USPS may not carry out any closure or consolidation recommended by the Commission if a joint resolution disapproving the recommendation is enacted.
Nonappealability
Closures or consolidations as a result of the Commission’s recommendations cannot be appealed to the PRC, or the subject of an advisory opinion, or judicial review.
Control Period
A control period commences whenever USPS has been in default to the Treasury of the United States, with respect to any loans, bonds, notes for a period of at least 30 days.
Treatment of USPS Executives
(A) all authorities and responsibilities of the Board of Governors, and the individual Governors of the Postal Service under title 39, U.S.C., and any other provision of law shall be assumed by the Authority.
Collective BargainingNotwithstanding any other provision of law --
(1) the Authority may require the renegotiation of an existing collective bargaining agreement to achieve specific economic savings and workforce flexibility goals;
(2) after meeting and conferring with the appropriate bargaining representative, the Authority may reject, modify, or terminate 1 or more terms or conditions of an existing collective bargaining agreement
Workforce Comparability
... any determination of ‘total rates and types of compensation’ or ‘total compensation and benefits’ shall, at a minimum, take into account pay, health benefits, retirement benefits, life insurance benefits, leave, holidays, and continuity and stability of employment.
S. 1010Postal Operations Sustainment and Transformation Act of 2011
• Determines surplus or liability
• Transfers surplus at the discretion of USPS BOG
• Instructions to Arbitrator on financial condition of USPS
• Increased co-location of services
• Permits closure of non-profitable post offices
• Provides for $7 billion FERS overpayment
Arbitration: Labor Disputes
(B) In rendering a decision under this paragraph, the arbitration board shall consider such relevant
factors as --
(i)the financial condition of the Postal Service;
(iii) the requirement related to pay and compensation comparability included in section 1003(a) of this title.
39 U.S.C., section 1003
...the Postal Service shall classify and fix the compensation and benefits of all officers and
employees in the Postal Service. It shall be the policy of the Postal Service to maintain
compensation and benefits for all employees on a standard of comparability to the compensation
and benefits paid for comparable levels of work in the private sector of the economy.
S. 353U.S. Postal Service Improvements Act of 2011
• Determines surplus or liability
• Transfers surplus at the discretion of USPS BOG
• Instructions to Arbitrator on financial condition of USPS
• Review of field office structure
• Increase in co-location of post offices
• Converts OWCP beneficiaries to regular annuity
S.353Sec. 102 - Consideration of Postal Service Financial Condition
“The arbitration board shall consider the financial condition of the Postal Service in rendering its
decision.”
S. 353Transfer of Employees on Workers Compensation to
Retirement
Converts federal and postal employees on workers’ compensation to
retirement upon reaching retirement age if workers’ compensation benefits
would exceed retirement benefits.
S 261Sen. Susan Collins (R-ME)
“Federal Employees’ Compensation Reform Act of 2011”
Requires termination of compensation when employee has reached retirement age and is eligible
for an annuity under FERS or CSRS
Not later than 1 year before eligible, employee’s employing agency files an application for an annuity
on behalf of the employee with OPM
How Many?
If the Postal Service were to receive additional freedoms, like six to five-day delivery, the Postal
Service could function with close to 400,000 employees through streamlining its network and
increasing customer access.
USPS CFO Corbett, March 2010
Rep. Darrell Issa (R-CA)
Source: Washington Times Editorial, September 20, 2010
The need to downsize the labor force and reduce costs to reflect declining demand and new market conditions needs to be the first priority of both workers and management.
Labor costs account for 80 percent of USPS operating expenses. Yet because of union contracts that contain "no-layoff" clauses, thousands have less than a full day's work, and some are even paid to sit in empty rooms.
The End?
It’s Up To Us!